Chinese Leaders Discuss Replacing PBOC Chief

Chinese leaders are discussing replacing the central bank chief amid disagreements over the direction of financial policy, raising questions over how quickly and deeply Beijing wants to remake the economy amid slowing growth.

Chinese leader Xi Jinping is considering removing Zhou Xiaochuan —the face of the Chinese economy to markets globally—as part of a wider personnel shuffle that comes after internal battles over economic overhauls.

The discussions occur as Mr. Xi, now two years in office, tries to place more allies into top positions in the government, military and Communist Party, said party officials with knowledge of the plans. The personnel shifts are expected around a major party conclave to be held in October, the officials said, while cautioning that no final decision about Mr. Zhou has been made.

Over the past few months, Mr. Zhou has continued to press for market changes, including liberalizing interest rates. The Chinese leadership, meanwhile, has become concerned that overhauls now will place another burden on an economy that is struggling to meet the government’s target of 7.5% annual growth.

One reason to retain Mr. Zhou is fear of the market reaction to his departure, the party officials said. Removing him could add to uncertainty about the direction of China’s economic-policy making and the strength of the leadership’s commitment to overhauls, said the party officials, at a time when many other parts of the global economy are sputtering.

Removing Mr. Zhou “could suggest a subtle shift in the balance of power between reformist and reactionary forces, with the momentum for change being eroded by the loss of growth momentum in the economy,” said Eswar Prasad, a China expert at Cornell University.

The top contender to succeed Mr. Zhou at the People’s Bank of China is Guo Shuqing, a former banker and top securities regulator who is currently governor of Shandong, a prosperous eastern province, the officials said. Mr. Guo, a longtime friend of Mr. Zhou, is also considered a reformer. But it remains to be seen whether he would push for overhauls as hard as Mr. Zhou has been, Chinese officials and scholars said.